India to reject EU proposal on Doha round

New Delhi: India will term as unfair and reject a new proposal by the European Union to rescue the stalled Doha trade round, New Delhi’s chief negotiator for the talks said, signalling a further setback to the dialogue stuck in its tenth year.

The EU floated a plan last month to tackle one of the biggest sticking points to the negotiations—industrial tariffs—to help bridge the divide between rich countries and major developing nations such as India and China.

India finds the proposed cuts in the tariffs of chemicals, pharmaceuticals and machinery too generous towards developed countries, and will instead argue that the likes of the United States and Europe should offer deeper concessions.

“India is very clearly going to take the view that this is not acceptable,” said Rajeev Kher, additional secretary at the trade ministry, at a seminar in the Indian capital on Tuesday.

The gulf over industrial tariffs is one of a clutch of issues that put the brakes on progress in the trade round that prompted the head of the World Trade Organisation (WTO) to say the talks were at “serious risk of failure” last month.

India is especially wary of being boxed into a corner and signing up to compulsory cuts in industrial tariffs, which Washington sees as essential to any deal. India among others wants such cuts to be done on a voluntary basis.

India has appealed to its domestic firms to give their assessment of the discussions in order to let the country’s negotiators gauge where they could give some leeway and which sectors to protect.

Asia’s third-largest economy has become a major voice in the negotiations in line with its growing economic and diplomatic clout on the world stage. India was at the centre of a row over farm tariffs that caused the talks to splutter in July 2008.

Supporters of the Doha round say it will unlock hundreds of billions of dollars in trade at a time when the world is still pulling itself out of the global economic slowdown.

Washington has pressed major emerging economies such as China, India and Brazil to make better offers for market access. The United States complains that India has not accepted the responsibility that comes with its growing economic strength in the world by shielding many sectors.

India accuses Washington of foot-dragging and argues that the Doha talks—officially called the Doha Development Round—should be seen in light of their stated goal to open markets and help developing countries prosper through trade.

New Delhi has negotiated with an eye on protecting the hundreds of millions of farmers and fishermen living below the poverty line in the shade of the country’s near double-digit growth story.

“The paradigm of discourse has completely changed,” Kher said. “We have moved from development to market access.”

“The very rationale of seeking this change of paradigm is not merely flawed, but crazy,” he added.

India has set itself an ambitious target to double its exports within three years to feed an economic boom and bolster its lagging manufacturing sector.